June U.S. CPI cools July rate-hike bets, but the case for tightening has not disappeared
U.S. inflation data for June gave markets room to pull back near-term Federal Reserve tightening expectations, but it did not settle the broader policy debate. Data released by the Bureau of Labor Statistics on July 14 showed headline CPI fell 0.4% month over month on a seasonally adjusted basis and slowed to 3.5% year over year from 4.2% in May. Core CPI, which excludes food and energy, was flat on the month and eased to 2.6% year over year from 2.9%. The immediate market response was clear. According to AP, traders cut the implied probability of a July rate hike to below 17%, down from about 42% a day earlier. The 10-year U.S. Treasury yield slipped to 4.58% from 4.62% on Monday, while equities rose and crypto assets such as BTC and ETH caught a short-term bid. Still, Federal Reserve Chair Kevin Warsh did not endorse the idea of a policy pivot in congressional testimony the same day. He said the Federal Open Market Committee has “no tolerance for persistent high inflation” and offered no signal that one favorable CPI report would be enough to change direction. For now, the June report appears to have raised the bar for a July hike rather than confirmed a broader easing turn.








